Canada's main stock index edged lower on Tuesday with losses led by industrials and energy companies, as oil prices fell and appetite for global stocks faltered.
The Toronto Stock Exchange's S&P/TSX composite index was down 68.24 points, or 0.45 per cent, to 15,173.64 at 11:12 a.m. ET.
On Monday, the index posted its biggest one-day gain since July 2016, with all 10 sectors in positive territory, as global stocks, oil and metals rebounded following a brutal week.
Energy companies Imperial Oil Ltd., Crew Energy Inc. and Precision Drilling Corp. were among the biggest decliners on the index, with losses of 3 per cent, 4.7 per cent and 5 per cent, respectively.
NuVista Energy Ltd. bucked the energy trend to rise 4.1 per cent a day after releasing its first-quarter producion guidance,
Mining company First Quantum Minerals Ltd. was the biggest gainer, jumping 5.5 per cent after the release of its fourth-quarter results on Monday.
Wall Street's main indexes fell for the first time in three sessions on Tuesday as caution crept in ahead of crucial data on inflation, a root cause of the recent sell-off.
A strong reading on U.S. consumer price and retail sales data on Wednesday could fan fears over rising inflation and faster interest rate hikes - the same worries that sparked the sell-off after strong jobs data on Feb. 2.
"Investors are probably positioning with a bit of a risk-off mindset going into those two (economic data reports) tomorrow," said Matt Miskin, market strategist at John Hancock Investments.
"The core CPI estimate is a modest decrease from last month. But in the event that inflation does accelerate, that could lead volatility to continue as the Goldilocks environment maybe under further pressure."
Cleveland Fed president Loretta Mester, a voting member in the central bank's rate-setting committee this year, said the recent stock market sell-off and jump in volatility will not damage the economy's overall strong prospects.
After a wildly volatile week that pushed the market into correction territory, U.S. stocks gained roughly 3 per cent over Friday and Monday, their best two-day gains since June 2016.
The Dow Jones Industrial Average was down 96.29 points, or 0.39 per cent, at 24,504.98, the S&P 500 was down 8.64 points, or 0.33 per cent, at 2,647.36 and the Nasdaq Composite was down 6.63 points, or 0.09 per cent, at 6,975.34.
Nine of the 11 major S&P indexes were lower, led by losses in the healthcare and financial indexes.
Benchmark U.S. 10-year Treasury yields were hovering at 2.8439 per cent, shy of their four-year peak of 2.9020 percent on Monday.
The CBOE Volatility Index, a widely-followed measure of short-term stock volatility, eased to near session-lows at 25.51, and well short of the 50-point mark it touched last week.
The recent pullback has wiped out all of the year's gains for the benchmark S&P 500 and the blue-chip Dow, which are now down about 0.7 per cent so far in 2018.
The tech-heavy Nasdaq was still clinging to a 1.22-per-cent gain for the year.
Of the 70 per cent of the S&P 500 companies that have reported earnings, nearly 78 per cent of them topping profit expectations, according to Thomson Reuters data. That is above the 72-per-cent average beat-rate in the past four quarters.
Shares of Under Armour rose more than 18 per cent after the sportswear maker reported quarterly revenue that beat analysts' estimates.
AmerisourceBergen jumped about 8 per cent after the Wall Street Journal reported Walgreens made a takeover approach for the drug distributor. Walgreens rose marginally.
Henry Schein and Patterson Companies fell 10 per cent and 9 per cent, respectively, after a U.S. Federal Trade Commission complaint against the dental supply companies.
Their losses were the biggest among healthcare distributors weighing up the possible ramifications of the AmerisourceBergen deal and a report of Amazon's push into the space.
Oil fell to its lowest in two months on Tuesday, giving up early gains after a forecasting agency estimated world crude supply could overtake demand this year, potentially undermining producer efforts to curb supply.
The Paris-based International Energy Agency raised its forecast for oil demand growth in 2018 to 1.4 million barrels per day, from a previous projection of 1.3 million bpd.
However, rapidly rising output, particularly in the United States, could well outweigh any pick-up in demand and begin to push up global oil inventories, which are now within sight of their five-year average.
"Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth," the IEA said.
Brent crude futures fell 72 cents to $61.87 a barrel, while U.S. West Texas Intermediate crude futures dropped 78 cents to $58.51.
"Overall, the IEA confirms its bearish view on global supply and demand, expecting no significant global stock draws in 2018," Petromatrix strategist Olivier Jakob said.
"OPEC has a more bullish view but has been forced to reduce its call-on-OPEC estimate over the last few months and it has the risk of showing further reductions since its forward outlook for U.S. crude seems to be unrealistically low."